Ost, Inc. v. United States ( 2018 )

In the United States Court of Federal Claims
No. 18-670C
(Filed: November 20, 2018)*
*Opinion originally filed under seal on November 15, 2018
)
OST, INC., )
)
Plaintiff, ) Bid Protest; Jurisdiction; Motion to
) Dismiss; Federal Acquisition
v. ) Streamlining Act of 1994 (FASA), 10
) U.S.C. § 4106(f)(1); Bad Faith.
THE UNITED STATES, )
)
Defendant. )
)
Thomas A. Coulter, Richmond, VA, for plaintiff. Nicole Hardin Brakstad, Richmond,
VA, of counsel.
Joshua Kurland, Civil Division, United States Department of Justice, Washington, D.C.,
with whom were Chad A. Readler, Acting Assistant Attorney General, Robert E.
Kirshman, Jr., Director, and Allison Kidd-Miller, Assistant Director, for defendant.
Whitney Michak, Attorney Advisor, Office of General Counsel, Defense Health Agency,
Aurora, Colorado, of counsel.
OPINION
FIRESTONE, Senior Judge
Pending before the court in this bid protest is plaintiff Optimal Solutions and
Technologies, Inc.’s (“OST”) motion for judgment on the administrative record together
with the defendant’s (“the government”) motion to dismiss pursuant to Rule 12(b)(1) of
the Rules of the United States Court of Federal Claims (“RCFC”) and its cross-motion for
judgment on the administrative record. At issue is the Defense Health Agency’s
(“DHA”) decision to issue a task order under the General Service Administration’s
(“GSA”) Alliant Government Wide Acquisition Contract (“Alliant GWAC”) for IT
services in connection with DHA’s E-Commerce Operations Systems Support (“EOSS”)
program. The EOSS allows DHA to process claims for its 9.4 million beneficiaries.
OST had been providing those IT services for DHA’s EOSS under a different DHA
contract vehicle, the Chief Information Officer-Solutions and Partners 3 (“CIO-SP3”)
GWAC. OST’s CIO-SP3 contract expired on July 13, 2018. The contract, however,
contained four option years which DHA elected not to exercise.
OST initially filed a motion for a preliminary injunction on May 10, 2018, arguing
that DHA’s decision to procure IT services through a task order under the Alliant GWAC
contract vehicle rather than exercise an option under OST’s contract was made in bad
faith and was contrary to law. (ECF No. 5). The government filed a response and a
partial motion to dismiss, addressing OST’s claim in two parts. First, the government
argued that the portion of OST’s claim concerning DHA’s decision not to exercise OST’s
option needed to be dismissed because the claim had to be resolved under the procedures
set forth in the Contract Disputes Act (“CDA”), 41 U.S.C. § 701 et seq. Second, the
government argued, with regard to OST’s claim that DHA’s decision to use the Alliant
GWAC was made in bad faith, that DHA’s decision to issue a task order under the
Alliant GWAC was required under DHA’s Procurement of Health Information
Technology Products and Services policy (“DHA policy”) and therefore had not been
made in bad faith. Under the DHA policy “if a service can be acquired by using GSA’s
2
Alliant GWAC or Alliant Small Business GWAC, then those vehicles shall be used to
procure the service.” AR 1 (emphasis added).
On June 22, 2018, the court denied OST’s motion for preliminary injunctive relief
and granted the government’s partial motion to dismiss. The court agreed with the
government that decisions relating to the exercise of options are matters of contract
administration governed by the CDA and outside this court’s bid protest jurisdiction. The
court also found that OST was not likely to succeed on the merits of its claim that DHA’s
decision to procure IT services under the Alliant GWAC was made in bad faith and was
arbitrary and capricious. See OST, Inc. v. United States, 2018 WL 3373023 (Fed. Cl. July
11, 2018). Thereafter, DHA issued the subject task order under the Alliant GWAC
contract.
In its pending motion for judgment on the administrative record filed on August 3,
2018, (ECF No. 34), OST contends that DHA’s decision to use the Alliant GWAC was
done purposefully to exclude OST from competing for IT services and thus was made in
bad faith and was arbitrary and capricious. Specifically, OST argues that the DHA policy
does not mandate the use of the Alliant GWAC to procure the IT services at issue in this
case and that the administrative record shows that DHA officials specifically chose the
Alliant GWAC to keep OST from competing for the subject IT services. OST is not
eligible to compete for task orders under the Alliant GWAC because it is not a contractor
authorized to bid under the Alliant GWAC.
The government argues in its motion to dismiss that this court lacks jurisdiction
over OST’s protest under the Federal Acquisition Streamlining Act of 1994 (“FASA”) 41
3
U.S.C. § 4106(f) on the grounds that OST is challenging the issuance of a task order.
Specifically, under FASA, 41 U.S.C. § 4106(f)(1) “[a] protest is not authorized in
connection with the issuance or proposed issuance of a task or delivery order except for--
(A) a protest on the ground that the order increases the scope, period, or maximum value
of the contract under which the order is issued; or (B) a protest [involves] an order valued
in excess of $10,000,000.” The government maintains that because the Alliant GWAC
task order does not exceed the scope of the Alliant GWAC and is not valued over
$10,000,000, OST’s protest must be dismissed. The government argues, in the
alternative, that should the court conclude that it has jurisdiction over the protest, that
OST’s bad faith argument is not supported. The government contends that the decision
to issue a task order under the Alliant GWAC was required by DHA’s policy because the
IT services needed are covered by that GWAC. The government argues that where, as
here, the decision to issue a task order under the Alliant GWAC was mandatory because
the needed services could be obtained through the Alliant GWAC, DHA had to use the
Alliant GWAC and did not act in bad faith.
For the reasons discussed below, the court finds that it does not have jurisdiction
over OST’s bid protest challenging DHA’s issuance of a task order under the Alliant
GWAC and thus the government’s motion to dismiss for lack of subject matter
jurisdiction is GRANTED.1
1
Although the court finds that OST’s protest is outside this court’s jurisdiction as a challenge to
a task order, in the interest of judicial economy the court is also addressing the merits of
plaintiff’s arguments based on allegations of bad faith as the court indicated that it would when it
denied plaintiff’s motion for preliminary injunctive relief. As discussed infra, the court finds
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I. Factual Background and Procedural History2
A. DHA’s E-Commerce System
TRICARE is the healthcare program of the United States Department of Defense
(“DOD”) which serves active duty and retired military personnel as well as their
dependents. AR 503. DHA is responsible for the management and operation of the
TIRCARE program to ensure that military health and private sector care services provide
service to the beneficiaries. Id. As part of the TRICARE program, beneficiaries are able
to obtain authorized care from civilian providers through Managed Care Support
Contracts (“MCSCs”) for which they are reimbursed. Id.In order to support this function, DHA has implemented the DHA E-Commerce
System (“ECS”), which provides an interface that supports MCSC payments and other
connected business management needs. Id. The E-Commerce Operational Systems
Support (“EOSS”) program at issue in this bid protest provides the technical support staff
for the ECS. Id. This includes the IT services needed to maintain, operate, and provide
engineering and technical support for the ECS. Id. As set forth in the solicitation “DHA
ECS applications support critical and time-sensitive financial and contract management
based on the administrative record that the plaintiff has not shown that DHA officials acted in
bad faith when they chose to secure IT services using a task order under the Alliant GWAC. The
court is not, however, entering judgment on the administrative record because jurisdiction is
lacking.
2
Many of the background facts were included in the court’s earlier opinion denying preliminary
injunctive relief and are summarized here. See OST, Inc. v. United States, 2018 WL 3373023(Fed. Cl. July 11, 2018).
5
operations” and allow DHA to process almost 200 million claims annually for 9.4 million
beneficiaries. AR 529, 22.
B. OST’s Contract
OST received a one-year contract with four one-year options in June 2017. AR
22, 137. The base year contract concluded on July 13, 2018. AR 137. OST’s contract
was procured under the National Institute of Health Information Technology Acquisition
Assessment Center (“NITAAC”) CIO-SP3 GWAC. Id. The Administrative Record
indicates that DHA was not satisfied with OST’s performance and had decided while
OST was still performing under its CIO-SP3 contract that DHA would not exercise its
option to extend OST’s contract beyond the first year. AR 137, 138, 247.
C. The Solicitation
On February 21, 2018, Graham Ininns, Chief, Contract Resource Management,
Program Manager, DHA E-Commerce Systems issued a memorandum to obtain approval
to “solicit the assistance of GSA [General Services Administration] to acquire a new
[EOSS] contract utilizing the [Alliant GWAC]” for a one-year contract with four one-
year option years. AR 15. In his memorandum, Mr. Ininns noted that the current
contractor, OST, was not performing well under its contract and that because of OST’s
poor performance “[i]t is crucial that a replacement contract is put into place to preserve
the ability to provide support to manage and operate the healthcare contracts as well as
process the millions of healthcare claims that come in daily.” Id. In conjunction with
Mr. Ininns’ memorandum to GSA, Todd Young, DHA’s Contracting Officer (“CO”) on
the OST contract, issued a determination and findings (“D&F”) regarding the best
6
procurement approach for the EOSS program contract. AR 22-24. In the D&F, DHA
indicated that it would be looking to award a new contract that would include a one-year
base period and four one-year options. AR 22. The D&F stated that “[t]he requirement
is within the scope of GSA’s Alliant program, and use of the Alliant program conforms
with DHA policy for Information Technology acquisitions (DHA Component
Acquisition Executive Memo: SUBJECT: Procurement of Health Information
Technology Product and Services).” AR 23. As noted, the DHA policy cited in the D&F
states, “[i]f a service can be acquired by using GSA’s Alliant GWAC or Alliant Small
Business GWAC, then one of those vehicles shall be used to procure the service.” AR 1.
Although Mr. Innins and Mr. Young initially hoped to secure the needed IT services by
having GSA conduct the procurement, GSA declined to conduct the procurement,
whereupon in early March 2018, DHA appointed its own CO, Kimberlymae Wood, to
oversee a DHA procurement under the Alliant GWAC. AR 7, 9, 15, 22-23. CO Wood
was located in a separate physical office from the individuals at DHA who were
responsible for administrating OST’s contract. AR 609.
On March 20, 2018, CO Wood submitted an Acquisition Strategy for the IT
services needed which was approved by James D. Berns, Chief, Contracting Operations
Division-Aurora, on March 30, 2018. AR 136. In her Acquisition Strategy, CO Wood
noted under the Acquisition Requirement Section that OST “is failing to perform,
primarily because they grossly failed to accurately estimate the workload and subsequent
manning required to perform EOSS services.” AR 137. In the Acquisition Strategy, CO
Wood also explained that market research was performed to identify potential GWACs
7
that could be used as the contract vehicle for the procurement. AR 140. Under the
section entitled Market Research, the Strategy document stated that “[a]fter identifying
the potential vehicles for the acquisition, it was determined the GSA Alliant Small
Business GWAC was closely aligned with the requirements of this acquisition. There are
(12) twelve small businesses on Alliant’s small business GWAC which appear capable of
performing the work.” Id. CO Wood further explained in a response to an inquiry from
an outside vendor, that as the CO, she had “determined that the GSA GWAC Alliant SB,
to be the most advantageous method of procurement.” AR 236.
DHA posted the draft/preliminary request for proposals (“RFP”) for the task order
under the Alliant GWAC on March 21, 2018. AR 143, 146. The RFP and the
instructions to offerors explained that the acquisition was being conducted in accordance
with FAR 16.505. AR 148, 285. After a number of Alliant GWAC small business
contractors elected to opt-in to the procurement, DHA finalized the RFP and posted the
solicitation on April 16, 2018, with a proposal submission date of May 11, 2018. AR
261. In the end, the RFP sought offers for a one-year firm fixed price level of effort
(“FFLOE”) contract valued at under $10 million. AR 263, 287.3
3
The decision to issue an RFP for only a one year task order was done in order to keep the price
of the proposed task order under the $10,000,000 threshold so that it would not be subject to a
challenge so that DHA would be able to issue a new task order before the expiration of OST’s
contract to ensure continuity of service. See AR 132-133. OST contends that the decision to
issue an RFP for only one year is evidence of bad faith on the grounds that the one-year decision
was to keep OST from protesting the task order. Pl.’s Mot. at 14, 29. The government disputes
this contention and argues that the one-year task order was designed to keep the EOSS system
operational. The merits of these contentions is discussed infra.
8
D. Procedural History
As discussed at the outset, OST filed its complaint with this court on May 10,
2018 challenging DHA’s decision not to exercise its option under OST’s contract but
instead to issue a request for proposals under the Alliant GWAC. On that same day OST
moved for a temporary restraining order and preliminary injunction. (ECF No. 5). As
also discussed above, the court granted the government’s partial motion to dismiss in part
holding that OST’s challenge to DHA’s failure to exercise one of the options on OST’s
contract was not cognizable under this court’s bid protest jurisdiction and had to be
resolved under the procedures set forth in the CDA. OST, Inc. v. United States, 2018 WL
3373023 (Fed. Cl. July 11, 2018). Additionally, the court denied OST’s motion for a
temporary restraining order and preliminary injunction, holding that OST was not likely
to succeed on the merits of its claim that the decision to use the Alliant GWAC was made
in bad faith. Id. The court also determined that the balance of hardship and public
interest weighed against preliminary injunctive relief. Id.Thereafter the Alliant GWAC task order was issued. OST moved for judgment on
the administrative record on August 3, 2018. (ECF No. 34). The government moved to
dismiss OST’s case and cross-moved for judgment on the administrative record. (ECF
No. 37). The court held oral argument on November 8, 2018.
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II. DISCUSSION
A. The Court Does Not Have Jurisdiction Over DHA’s Decision To
Obtain IT Services Using A Task Order Under The Alliant GWAC
The United States Court of Federal Claims has “jurisdiction to render judgment on
an action by an interested party objecting to a solicitation by a Federal Agency for bids or
proposals for a proposed contract or to a proposed award or the award of a contract or
any alleged violation of statue or regulation in connection with a procurement or a
proposed procurement.” 28 U.S.C. § 1491(b)(1). However, the court’s bid protest
jurisdiction is not unlimited and under FASA, 41 U.S.C. § 4106(f)(1), this court does not
have jurisdiction to hear protests “in connection with the issuance or proposed issuance
of a task order, except for (A) a protest on the grounds that the order increases the scope,
period, or maximum value of the contract under which the order is issued; or (B) a protest
of an order valued in excess of $10,000,000.” 41 U.S.C. § 4106(f)(1). The limits of this
court’s jurisdiction based on FASA have been explained by the United States Court of
Appeals for the Federal Circuit as follows: “[T]he statutory language of FASA is clear
and gives the court no room to exercise jurisdiction over claims made ‘in connection with
the issuance or proposed issuance of a task or delivery order.’” SRA Int’l, Inc. v. United
States, 766 F.3d 1409, 1413 (Fed. Cir. 2014) (quoting 10 U.S.C. § 2304c(e))
(acknowledging that “this statute is somewhat unusual in that it effectively eliminates all
judicial review for protests made in connection with a procurement designated as a task
order”).
10
Whether this court has jurisdiction to hear OST’s protest turns on whether it is
barred by FASA. The government argues that OST’s bid protest is barred by FASA
because OST’s challenge is inextricably tied to DHA’s decision to procure IT services
using a task order under the Alliant GWAC. The government argues that this result is
compelled by the Federal Circuit’s decision in SRA Int’l, Inc.. In SRA Int’l, Inc. the
protestor challenged the GSA’s issuance of an Organizational Conflict of Interest
(“OCI”) waiver after the agency had awarded a different task order under the Alliant
GWAC. Id. at 1411. The Federal Circuit held that the Court of Federal Claims erred in
exercising jurisdiction over SRA’s claims because SRA’s protest of an OCI waiver was
made in connection with the issuance of a task order under the Alliant GWAC. Id. at
1413-14.
The government argues that the Federal Circuit’s decision in SRA Int’l, Inc
mandates that OST’s case be dismissed because OST’s objection to DHA’s action hinges
on DHA’s decision to issue a task order. The government contends that a challenge to
issuance of a task order on the grounds that a specific task order was selected because the
protestor was not eligible to compete is still a challenge to the issuance of a task order
and thus falls within the FASA ban. In support, the government relies on Mori
Associates, Inc. v. United States, 113 Fed. Cl. 33 (2013), in which a protestor also
challenged an agency decision to issue a task order on the grounds that the specific task
order was selected in order to keep the incumbent from competing. In Mori the court
held that it did not have jurisdiction to hear the case under FASA. In dismissing the
protest for lack of jurisdiction, the Mori court held that FASA does not bar a protest
11
involving task orders when there is no causal relationship between the alleged protest and
the issuance of a task order. However, “when a protest challenges the decision to obtain
services by requesting proposals from ... task order contract holders, the FASA
prohibition on protests clearly applies.” Id. at 38. Here, the government argues, OST is
challenging the issuance of a specific type of task order and thus FASA applies.
OST argues that this court should exercise jurisdiction because OST is challenging
the DHA’s allegedly “bad faith” decision to find a contract vehicle designed to keep OST
from competing. OST contends that DHA’s decision to find that contract vehicle is
distinct from the proposed issuance of a task order under the Alliant GWAC. Pl.’s Resp.
to Mot. to Dismiss at 4. According to OST, DHA’s decision to issue the task order under
the Alliant GWAC “is a mere consequence of the improper procurement decision at
issue[,]” i.e. the decision to exclude OST from the competition. Id.In support of its argument, OST relies on this court’s decisions in BayFirst
Solution, LLC v. United States, 104 Fed. Cl. 493 (2012) and McAfee, Inc. v. United
States, 111 Fed. Cl. 696 (2013). In BayFirst, the protestor was challenging the
cancellation of a solicitation as well as the issuance of a task order. 104 Fed. Cl. at 499.
The court in BayFirst, held that the FASA jurisdictional bar did not apply to the agency’s
decision to cancel a solicitation. Id. at 507-08. Specifically, the court held that although
the cancellation of the solicitation and issuance of the task order were temporally
connected, the cancellation of the solicitation can be viewed as “a discrete procurement
decision and thus could have been the subject of a separate protest.” Id. at 507. In
McAfee, the court also found that FASA did not bar a protest on the grounds that the
12
protestor was challenging the agency’s threshold decision to standardize a security
network and not the issuance of a task order. 111 Fed. Cl. at 709-10. The court found
that the decision to standardize the security network was a separate decision from the
decision to issue the task order and thus was not in connection with a task order. Id.
OST argues that the distinctions made in BayFirst and McAfee should be applied to
OST’s bid protest. Specifically, OST maintains that the DHA’s decision to exclude OST
from competing for the follow-on contract is a distinct decision that is separate from the
decision to issue a task order for IT services under the Alliant GWAC. OST further
argues that Mori is distinguishable from the pending case because in Mori the agency was
making a decision between issuing a task order under two different contacts and thus this
court would not have had jurisdiction under FASA to hear a challenge to issuance of a
task order under the contract the protestor wanted in any event.
The court has considered the parties’ arguments and agrees with the government
that it does not have jurisdiction to hear OST’s bid protest because of the jurisdictional
limitations set in FASA. The Federal Circuit in SRA Int., Inc. recognized that “[t]he
statutory language of FASA is clear and gives the court no room to exercise jurisdiction,”
except for situations not applicable here, so that it “effectively eliminates all judicial
review for protests made in connection with a procurement designated as a task order.”
766 F.3d at 1413. Although OST contends that DHA made a decision to exclude OST
from competing for follow-on IT services separate from DHA’s decision to issue a task
order under the Alliant GWAC, this view is not supported by the record. The record
shows that DHA made a decision not to exercise the option on OST’s contract and to find
13
another contract vehicle. The record does not show that DHA made then another
decision to keep OST out of any future competition. Rather, the record shows that the
DHA examined its options and determined that because the Alliant GWAC could meet its
needs, DHA policy required that the Alliant GWAC be used. OST’s ineligibility to
compete is tied directly to DHA’s decision to issue a task order under the Alliant GWAC.
For this reason, the court finds that the present case is virtually identical to Mori. There,
the court found that FASA deprived the court of jurisdiction to hear the bid protest
because a challenge to issuance of a task order using a contracting vehicle under which
the protestor could not compete was in fact a challenge in connection with a task order.
Mori, 113 Fed. Cl. at 38. The court finds the same reasoning applies here.
In addition, this court finds that this case is very different from both Bayside and
McAfee on which OST relies. In both of those cases the court found that at least portions
of the protestor’s bid protest were within this court’s jurisdiction because they were
plainly separate from the decision to issue a task order. Specifically, in Bayside the court
held that it had jurisdiction over the protestor’s allegations concerning the improper
cancellation of a solicitation for services that were eventually procured using a task order.
104 Fed. Cl. at 507. Here the only discrete prior decision by DHA, as noted above, was
DHA’s decision not to exercise its option under OST’s expired contract. That decision,
however, only can be considered under the CDA and is not now before the court. There
was no separate decision to keep OST from competing. OST’s inability to compete was a
consequence of DHA’s decision to issue a task order under the Alliant GWAC.
Similarly, unlike the protestor in McAfee, OST is not challenging the underlying decision
14
to acquire IT services or the type of IT services to be acquired which is “not tied to any
single solicitation or delivery order[.]” 111 Fed. Cl. at 696. Rather, OST is challenging
the task order DHA selected on the grounds that OST cannot compete under that task
order. OST’s protest is thus clearly in connection with the issuance of a specific task
order. In such circumstances, FASA bars OST’s bid protest.
B. Plaintiff Cannot Establish that DHA Officials Acted in Bad Faith by
Selecting the Alliant GWAC
As discussed above, although the court finds that it does not have jurisdiction to
hear OST’s bid protest due to the jurisdictional bar in FASA, the court finds that even if it
could rule on the merits of OST’s bad faith claim, OST would still not prevail. OST
argues that the government’s reliance on the “Procurement of Health Information
Technology Products and Services”, policy to show that DHA had to use the Alliant
GWAC is unsupported. According to OST, the “primary objective of [the above-cited
policy] is to provide the DHA ECS (E-Commerce System) with IT support services”
which is not the same as the acquisition of health information technology. OST argues
further that DHA has used other contracts for IT health-related services including the
CIO-SP3 GWAC. In support of its argument, OST has attached to its motion for
judgment on the administrative record the RFP for another procurement that OST
maintains is for similar services to those at issue in this case but was issued by DHA
under the CIO-SP3 GWAC for the “Defense Health Agency (DHA), Health Information
Technology, Solution Delivery Division (SDD), and Clinical Support Branch for the
[Nutrition Management Information System and Special Needs Program Management
15
Information Systems].” Pl.’s Mot., Ex. 1 at 1. OST also argues that DHA’s CO Wood
did not specifically reference a “mandatory” policy requiring the use of the Alliant
GWAC contracting vehicle when she selected the Alliant GWAC. OST contends that
there would have been no reason for CO Wood to conduct “market research” to
determine the most appropriate contracting vehicle for IT services if DHA had to use the
Alliant GWAC as a matter of policy. Finally, OST argues that DHA’s decision to keep
the procurement under $10,000,000 was done intentionally to keep OST from
challenging the procurement under FASA. According to OST, it is for these basic
reasons that the only plausible explanation for DHA’s decision to use the Alliant GWAC
was to harm OST by keeping it from competing for DHA’s IT needs.
In response, the government argues that none of these arguments undermines the
presumption of good faith that attaches to government decision-making. Def.’s Mot. to
Dismiss at 22. First, the government explains that the record makes clear that if the
Alliant GWAC can be used to secure the needed IT services for DHA that DHA must
then use the Alliant GWAC to obtain the IT services. The government states that the
plain language of the “Procurement of Health Information Technology Products and
Services” policy mandates the use of the Alliant GWAC as the procurement vehicle for
procuring the IT services at issue in this bid protest. Specifically, the government cites
the portion of the policy that states that “DHA contracting officer shall comply with the
following policy when procuring HIT products and services” and that “[i]f a service can
be acquired by using GSA’s Alliant GWAC or Alliant Small Business GWAC, then one
of those vehicles shall be used to procure the service.” AR 1 (emphasis added.). The
16
government argues that the solicitation makes clear that it is procuring health IT services
which are covered by the policy in question. Specifically, the government argues that the
RFP’s performance work statement explains how the procurement seeks “IT service to
maintain, operate, and provide engineering and technical support for the DHA ECS
program” and that those IT services include the “administration and maintenance of
existing DHCA ECS custom software[.]” AR 501. Therefore, the government maintains
that the procurement at issue clearly falls within the scope of the “Procurement of Health
Information Technology Products and Services” policy and that once CO Wood
confirmed that there were contractors capable of providing the needed services under the
Alliant Small Business GWAC the DHA had to use that contract vehicle. In such
circumstances the government contends OST has not shown how the procurement
decision, consistent with a mandatory policy, was made in bad faith.
Second, the government argues that OST’s reliance on the RFP attached to its
motion is misplaced because it is not part of the administrative record. Furthermore, the
government argues that even if the court were to consider the RFP attached to its
memorandum, the RFP is not for a DHA procurement and thus it is irrelevant to the issue
before the court. The government explains that the RFP referenced by OST was issued
for a procurement issued by the U.S. Army Medical Research Acquisition Activity
(“USAMRAA”) at Fort Detrick, Maryland to fulfill a DHA requirement and thus DHA’s
procurement policies did not directly apply.
Third, with regard to OST’s claim that CO Wood’s “market survey,” proves the
Alliant GWAC was not mandated, the government explains that CO Wood conducted her
17
market research in accordance with the subject DHA policy to ensure that there were a
sufficient number of Alliant Small Business GWAC vendors able to compete for the
procurement pursuant to the policy. See AR 116, 129, 135, 140, 239, 637-42. Finally,
the government argues that DHA’s decision to keep the Alliant GWAC under
$10,000,000 was not done to harm OST but to ensure that DHA was able to change
service providers without any interruption of services and thus DHA designed the
procurement to fit within FASA’s jurisdictional bar.
The court agrees with the government that OST’s arguments that the DHA policy
did not mandate the use of the Alliant GWAC and thus the decision to procure the needed
services through the Alliant GWAC was made in bad faith to harm OST is without
support. Bad faith must be established with “well-nigh irrefragable poof” according to
the Federal Circuit with evidence to show a “‘specific intent to injure the plaintiff.’” Am–
Pro Protective Agency, Inc. v. United States, 281 F.3d 1234, 1240 (Fed. Cir. 2002)
(citation omitted). Here, OST has not met its burden. Indeed, it has not presented any
hard facts that would support further investigation into DHA’s actions. To begin, the
court finds that DHA’s policy does mandate the use of the Alliant GWAC where there
are vendors to meet DHA’s needs. In addition, the court finds that the DHA reasonably
concluded that its policy applied to the services at issue in this case. By its terms it
states: “[if] a service can be acquired by using GSA’s Alliant GWAC or the Alliant Small
Business GWAC, the one of those vehicles shall be used to procure the service.” AR 1.
The services involved in this acquisition are “IT service[s] to maintain, operate, and
provide engineering and technical support for the DHA ECS program.” AR 501. OST’s
18
attempt to parse the language of the policy and the RFP is unconvincing. Thus the IT
services provided for under Alliant GWAC clearly encompass the health information
technology services needed by DHA to service its 9.4 million users. In this connection,
the court further finds that OST’s reliance on the RFP attached to its memoranda is not
properly before the court and irrelevant in any case. OST has not moved to supplement
the administrative record. Moreover, the RFP concerns a proposal issued and
administered by a different agency and not DHA. As such, the RFP OST relies on has no
bearing on this case.
Further, the court agrees with the government that CO Wood’s “market survey”
was not inconsistent with the DHA policy or use of the Alliant GWAC. CO Wood
needed to confirm that the Alliant GWAC could meet DHA’s needs. The court also finds
that CO Woods did in fact rely on the DHA policy in making her final decision to use the
Alliant GWAC. See AR 23, 236. Finally, the court agrees with the government that
DHA’s decision to keep the task order to less than $10,000,000 and thus within FASA’s
bid protest limitation does not evince bad faith toward OST but is consistent with DHA’s
claim that it needed to change service providers without interruption.
Given the record in this case, OST has failed to overcome the presumption of good
faith attached to government decision-making. OST has not produced any hard facts to
show that DHA’s decision to use the Alliant GWAC to obtain the needed IT services was
made for the sole purpose of harming OST and not to fulfill its legitimate need for IT
services. To the contrary, the record establishes that DHA had a legitimate government
reason for using the Alliant GWAC to meet its IT needs.
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CONCLUSION
For the reasons stated above, the government’s motion to dismiss is GRANTED,
OST’s motion for judgment on the administrative record and the government’s cross-
motion for judgment on the administrative record are denied as MOOT. The Clerk is
directed to enter judgment accordingly. No costs.
IT IS SO ORDERED.
s/Nancy B. Firestone
NANCY B. FIRESTONE
Senior Judge
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